The net profit of 2022Q2 is 325 million yuan, which is better than that of 2022Q1. The company's 2022H1 realized operating income of 8.817 billion yuan, an increase of 7.27% over the previous year, and realized a net profit of-677 million yuan, a decrease of 316.18% over the previous year. Benefiting from the rebound in pig prices from April 2022, 2022Q2's performance loss narrowed significantly, with a net profit of-325 million yuan, an increase of 7.7% from the previous month.
The scale of feed and aquaculture business has expanded steadily and is expected to benefit from the warming of aquaculture. From a business point of view: (1) Feed sector: 2022H1 revenue is 5.022 billion yuan, gross profit margin is 4.5%, sales volume is 1.3217 million tons, respectively year-on-year changes of 11.11%,-1.28%, + 3.50%. In the context of the decline in pig feed sales across the country, the company's pig feed sales still achieved a year-on-year increase of 1.15%, sales reached 772200 tons, while the company's aquatic feed business expansion efforts, 2022H1 growth is obvious. (2) breeding sector: the income from pig farming in 2022H1 was 1.948 billion yuan, down 9.03% from the same period last year, and 2.3439 million pigs were produced, an increase of 86.14% over the same period last year. Affected by the overall low pig prices and rising grain prices in 2022H1, the breeding business is under obvious pressure. The gross profit margin of 2022H1 is-20.48%, which is 39.92% lower than that of the same period last year. The company's breeding capacity is in a steady increasing phase. by the end of June 2022, the company had kept 2.0003 million live pigs, an increase of 28.69% over the end of June 2021, including more than 270000 breeding sows and more than 70,000 reserve sows. Pig production throughout the year is expected to continue to maintain rapid growth, or will benefit from the future boom in pig prices.
Full-chain layout of pig breeding rookies, fattening capacity may continue to volume. Centering on the double main industry development strategy of "feed + breeding" and "pig" as the core, the company has completed the layout of the whole industry chain of live pigs from upstream feed production to downstream food processing. In feed business, the company's feed products cover three categories: compound feed, compound feed and concentrated feed, covering the feeding needs of suckling pigs, piglets, sows and large, medium and small pigs at all stages. In terms of breeding business, the company vertically established a pyramid self-breeding system of improved pig breeds composed of breeding population, propagation group and commodity group, and horizontally completed the layout of the main breeding areas in the country. the preparations for the core breeding population and the propagation group are basically completed. At the same time, the company implements the concept of integrated epidemic prevention, takes agricultural Internet and animal protection business as the escort of breeding business, and further realizes the extension of downstream slaughtering and processing business. At present, the construction achievements of the company's efficient integrated breeding system are gradually realized, and it is expected that with the improvement of fattening capacity utilization rate in the future, there is still a large marginal room for cost improvement.
Risk hint: there is an uncontrollable epidemic in the process of breeding, and food prices rise sharply to increase feed costs.
Investment advice: maintain a buy rating. As a rookie in pig farming, the company has established an efficient and safe self-breeding system, and its fattening capacity is expected to increase steadily in the future, and there is still significant marginal room for improvement in cost. Considering that the pig price has picked up since April 2022, we raise the company's 22-year profit forecast. It is estimated that the 22-24 net profit of the company will be 0.22 million RMB 2.49pm (the original estimated 22-23 net profit will be-2.92 pm 3.316 billion yuan respectively), and the corresponding EPS will be 0.03 pm 2.35pm 1.69 yuan respectively.